Economic Resources Flashcards
What are the four factors of production?
Land, Labour, Enterprise and Capital
What do firms do with these resources?
Turn them into products that they sell for profit
What is Labour?
Includes all of the workforce in an economy
Is every worker unique with different skills?
Yes
What is the value of a worker called?
Human capital
How can a worker be valued?
By the income they earn, education and training, and likelihood to increase a businesses human capital
What is Land?
It encompasses all of the natural resources that come from the earth that are used in the production of goods or services
What is Capital?
Has a number of meanings e.g. money
-Refers to the man-made aids that are used in the production process e.g. machinery, tools, factories and offices
Will capital goods bring a stream of income in the future?
Yes
E.g. a car being used as a taxi is a capital good, rather than one just for leisure
What is Enterprise?
The entrepreneur takes land, labour and capital and organises them in order to produce products that will be profitable